Beijing’s trade agreement with Australia allows Chinese companies to use their own workers. Is Canada next?

Expert says China will push for right to import workers as part of any trade agreement. Photo from Shutterstock.

As Prime Minister Justin Trudeau makes his first official visit to China, critics fear the government’s eagerness to sign a free trade agreement with Beijing could lead to a bad deal for Canadian workers.

That’s what happened when Australia signed a free trade agreement with China last year, warns Andrew Dettmer, national president of the Australian Manufacturing Workers Union.

The China-Australia Free Trade Agreement gave Chinese enterprises the right to bring in an unlimited number of workers for major projects, the union says.

“An agreement like ChAFTA is a road to ruin for Canadian jobs,” Dettmer told The Tyee. “It won’t provide anything by way of advantage to Canadian industry.”

Trudeau heads to Hangzhou, China this week for a G20 meeting where he will promote trade expansion. The Globe and Mail reported earlier this year that Ottawa wants to sign a free trade agreement with China. The government enlisted former Australian prime minister Kevin Rudd, a supporter of the Australian agreement, as an advisor.

The government said it hasn’t officially decided to start negotiations on an FTA, but Trudeau has said it’s a “goal to look towards.”

Canadian business groups and China’s government have said they want a deal.

In free trade agreements China has signed with other countries, including Australia, the ability of Chinese companies to import their own temporary workers has been part of the deal.

In the China-Australia agreement, Chinese companies have the right to import labour on some projects worth more than $150 million in Australian dollars (about C$148 million).

The trade pact says neither country can “impose or maintain any limitations on the total number of visas to be granted to natural persons of the other party” or “require labour market testing, economic needs testing or other procedures of similar effect as a condition for temporary entry.” The agreement says workers still need the required training to perform their jobs.

The Australian government says that despite the agreement, jobs will still be protected through labour market testing and other conditions.

And Dettmer said the right to import Chinese workers could apply to a wide range of projects, from mines to highrises to public infrastructure, threatening many jobs.

The ability to import workers applies even if the Chinese company is a minority partner in a venture, opening the door to abuse, Dettmer said. “If an Australian company wishes to avoid Australian paying conditions, all they have to do is to have, in theory at least, a Chinese partner who would be prepared to put up that equity,” he said.

The right to bring Chinese workers to Canada is already on Beijing’s agenda. In 2014, China’s consul general in Calgary said Ottawa should relax its immigration laws so Chinese companies could bring in their own workers to lower costs. (A Tyee report found China does not extend similar rights to foreign countries doing business within its borders.)

The Tyee asked Global Affairs Canada, which oversees international trade, if provisions allowing Chinese companies to import labour would be considered in any FTA talks.

The department initially sent back an emailed statement that did not address the question, saying the government wants to “deepen and broaden engagement with China,” including trade.

The Tyee followed up with a question asking for a clear answer on whether allowing Chinese companies to import more workers would be on the table in trade talks.

Spokesperson Diana Khaddaj said in an email that Ottawa wants to revamp work permit programs to encourage hiring and training Canadians and limit foreign workers. Khaddaj said any talk of an FTA with China is “speculation.”

‘Why haven’t they ruled it out completely?’

The government’s position alarmed some Canadian labour leaders.

Gil McGowan of the Alberta Federation of Labour said the government’s response was troubling because it failed to rule out concessions like those in the Australian agreement.

“What exactly is that supposed to mean?” he said. “Why haven’t they ruled it out completely?”

McGowan said other trade deals like the still-to-be-ratified CETA agreement with the European Union have sections on foreign workers.

But China should be treated differently, McGowan said. He wants the government to promise to reject any FTA that allows Chinese companies to import their own labour.

Beijing has been undermining employment in western nations for years through state subsidies, currency manipulation and protectionist trade policies, he said. A deal allowing them to bring in their own workers would be “insane,” he added.

“Isn’t it bad enough that we have allowed China to get away with all these things that have lead to the offshoring of literally hundreds of thousands of Canadian jobs?” McGowan said.

McGowan said the recent decision to ease restrictions on the use of Temporary Foreign Workers raises doubts about the government’s sincerity in promising to protect Canadian jobs.

United Steelworkers Union director Steve Hunt said importing labour is common practice for Chinese firms around the world. He pointed to the example of HD Mining, which was granted permits for a plan to bring in 201 Chinese miners for a project near Tumbler Ridge in northern British Columbia.

The company’s use of the Temporary Foreign Worker Program sparked a controversy in 2012.

“It’s risky politically because of the firestorm that came out of HD Mining and some other notable cases,” Hunt said. “We forced Harper out of his hidey-hole and he had to come out and say ‘we made some mistakes.’”

He predicted any deal allowing Chinese companies to import workers would result in a massive public pushback against the Trudeau Liberals.

The issue is critical for resource-dependent communities, which count on the jobs provided by major projects to sustain the local economy.

Chinese Firms Bringing Own Workers a Global Pattern: Expert

Unemployment rates in resource communities have risen sharply after the oil crash, even in cities like Grand Prairie and Fort St. John with relatively strong natural gas sectors.

The hard times have hit businesses outside the resource sector, says Brian Glavin, the economic development manager for Grande Prairie.

For example, Glavin said, local hotels aren’t being used to house workers, which means local restaurants have fewer customers.

And it doesn’t end there. “Retail has seen a bit of a hit,” Glavin added. “If you’re not confident about your employment situation, you’re a lot less likely to buy big ticket items.”

Ottawa would be poking a hornets’ nest if it allowed Chinese companies to import labour to places in need of stable jobs, McGowan said.

Charles Burton, a Brock University political science professor with a focus on China, said Beijing has consistently sought to use its own workers as it invested in other countries.

“What this really is about is with China’s increasing investment in natural resources and other sectors that the Chinese government state firms hope to do what they do in other countries, bring in labour from China as opposed to providing employment opportunities for people locally,” he said.

The strategy keeps the money made by workers in the Chinese system and allows the companies to provide poorer working conditions, he said. China is unlikely to extend the same rights to Canadian companies operating there, he added.

Burton predicts serious damage to the Trudeau brand if “the government is not acting in the interests of Canada as a whole.”

Meanwhile, back in Australia, Andrew Dettmer said governments need to look out for the interests of their public, rather than the minority who want to get rich off doing business with China.

The issue is “life and death” for the middle class, he said.

“We still have these neoliberal halfwits who think it incumbent upon themselves to trade away our rights both externally as a trading action and internally as respect to workers’ rights,” he said. “It plumbs the depths of human stupidity.”

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